default cliff and they came up with the debt deal that tonight has not been resolved. they will punch it again with the mini band aid. a government agency that can't act and can't cope with each ore and can't resolve problems and can't move past crisis on the brink. so that is really a problem for us long-term. it is permanently corrosive. but like i said, look to both parties to say that they acted together to get the taxpayer beyond this crisis that the bush tax cuts presented. that is the only thing i think we will really resolve, though. >> bret: that's right and we will resolve. it at least will be 2013 by the time we deal with all of this. a.b., happy new year. thanks for joining us tonight. >> the thanks, bret. stand by. we will restart in just a moment with the latest on the fiscal cliff. this is a fox news alert. i'm bret baier live in

washington. we are following what is developing to be the beginnings of a deal. we heard of a deal all day long between senator mitch mcconnell, the senate minority leader and vice president joe biden. they have been talking nonstop about trying to come to some conclusion. a little bit of a scaled back version of the original grand bargain to deal with the expiring bush era tax cuts and also to deal with the impending sequester, the across-the-board cuts that would hit the pentagon and also domestic spend ising. they have according to the white house and senate republicans reached a deal but vice president biden is up on the senate side right now behind closed doors trying to convince some skeptical senate democrats to sign on to this before this piece of legislation hits the senate floor. we begin with our restart and to tell us exactly where we are at this hour, and this hour by the way is just two hours ahead

of 2013. there you see the specifics of the deal. the framework. tax hikes on family income above $400,000 for an individual. $450,000 for a family. the top tax rate going to 39.6% from 35. 39.6% is the clinton range. the tax rate back in president clinton's term in office. prevents the expansion of the alternative minimum tax. the amt. essentially patches it permanently, the amt. that had long been a an annual chore for congress. extends long-term unemployment benefits and deals with a number of other specifics including tax credits and sets the estate tax individually at $5 million and an additional in tare hans beyond that at 40 o percent. more details as well. for those we turn to chief congressional correspondent mike emanuel following all of

this up on capitol hill. mike? >> bret, essentially what this came down to is after senate majority leader harry reid did not return a counter proposal to senate republican leader mitch mcconnell he got on the phone with vice president biden who is known for cutting deals and they worked through the night and senator mcconnell told colleagues he thought he had a deal with the vice president on the whole tax issue and then at the last minute the white house threw in the idea of putting off these automatic cuts set to start in 2013. the sequestration. the across-the-board cuts to defense spending, regardless of merit of program, just slashing each program and also domestic cuts as well. the republicans were thought to not like the defense cuts. democrats were thought not to like the domestic cuts and so they thought that they would be able to figure it out before it got to this point but here we are on new year's eve late into the evening and they had not cut a deal and so what senate

republican leader mitch mcconnell did was offer a bunch of different pay fors, if you will to put off those cuts for two months to allow the next congress to figure out how to find more surgical cuts than essentially the automatic cuts that were due to kick in in january. now, there is a lot of back and forth. there is some things republicans don't like about this deal. some things those on the left don't like about this deal. i just heard from a prominent republican senator who thinks that the democrats will lose some of their most liberal members on this deal who are unhappy about the tax rate issue. they wanted it more to only extend the bush tax cuts to those making up to $200,000 or couples making up to $250,000. the number will be higher than that. bottom line, a lot of republicans in the senate feel like the rank and file democrats will likely fall in line and support the deal. so they think in the end that

there will be the votes to pass the senate, bret. >> bret: so what if you can, judging from your reporting up there, tell us what vice president biden s really doing up there at the senate democratic caucus meeting? if all of these signals from the white house and from leadership is that we have a deal what do you think the talk is behind those doors? >> well, undoubtedly he is going to say that he thinks going back to the clinton rates for taxes on upper income people is a good thing. that is a victory on the democratic side. he is going to say extending unemployment benefits is something democrats wanted very badly for another year. that is a good thing that we got out of this deal and he isinging to say that there was some wiggle room on the estate tax and bottom line that they are going to be able to say to members that we campaigned ehe sentencingly on raising taxes on upper income americans, we are doing that and we are also keeping the economy from going off the fiscal cliff so we

expect those will be some of the pitches that the vice president is making to the most liberal members of his party who are unhappy with the tax levels who thought the estate tax should have gone much higher and were unhappy with the compromises struck. about tomorrow line, this is pressure on the left from the afl-cio. pressure on the right from the heritage foundation who is calling this a kick the can down the road deal. there is pressure from both sides but you as retiring republican senator kay bailey hutchinson said, i don't love the deal but it is a compromise and it is probably a pretty fair deal. bret? >> bret: mike, frankly as we look live there on the the screen as the ohio clock position just outside the senate chamber, the spot where senate republicans come to speak to reporters and the reporters are mulling around there waiting for that democratic caucus meeting to finish up, but the bottom line here is that they are going to have to deal with this all

again in just a few weeks as republicans are setting up, mike, to really fight the spending cut battle using the debt ceiling increase as their backstop. using the debt ceiling increase as leverage come february and it looks like that we are setting up for what could be another standoff in washington just a few weeks into the new year. >> bret, no question about that. that was something we heard the president say he did not want to go through another one of the debt ceiling fights and wanted that to be included in this deal. it is not. republicans a lot of them i talked to today are are saying we will live to fight another day in the new year. we will be able to go after raising the debt ceiling with some serious spending cuts and so if you believe that argument that in the new year are they will be able to fight it and that the president's leverage will never be better than it is right now, immediately after

his reelection, republicans believe they will able to fight for serious spending cuts in the new year. otherwise the debt ceiling will come down to the wire, once again. bottom line, the republicans in the senate feel like essentially if this passes with a good bipartisan margin it should have a good shot in the house but, of course, the house is a different animal. there are are different people who represent different constituencies there and so we will wait and see if they get the bill should it pass sometime late night tonight, bret. >> bret: mike emanuel live on the hill. thank you. turning now to the white house. chief white house correspondent ed henry live on the north lawn. mike mentioned ed that the house, a lot of them got reelected, a lot got elected to spending not the raise taxes. the house is still controlled

by republicans so when president obama has his talk about campaigning and run and getting a mandate on raising taxes on the upper tier, these republicans fight back with their own o individual races. >> no doubt about it. and that is why we had this clash. you will remember that right after the election i remember full well that these negotiations which started with the president and speaker boehner, they are are ending now with senator mcconnell and vice president biden but within days aft election speaker boehner sent a letter to the president of the united states saying we just had a status quo election. that was from the speaker. inside the white house they didn't believe it was a status quo election. they believe the president won decisively and did get the mandate. house republicans believe they had a mandate to cut spending and the president believed he had a mandate to raise taxes. they will have the same clash two months from now. not just over the sequester which will be back in two

months but in two months another clash over the debt ceiling. i'm not sure anybody wins tonight when they are kicking the can down the road again. nation will still be watching this closely. the markets will be watching it closely but the white house will believe in the days ahead that they won because in this fight the president in the end is getting the tax cuts for the middle class he wanted. he is getting the tax increases on the rich that he wanted. and there are no major spending cuts. no major entitlement reform that the republicans, the house republicans wanted. as mike suggested they believe the republicans do that they will get those in the debt ceiling fight. we'll see. the bottom line is that a top official here are told me a short time ago they are not spiking the ball tonight because they know full well house republicans still have to sign off on the quote unquote deal and senate republicans and that is why vice president biden is up there lobbying them to report it. we'll see. they say they are not spiking the ball. earlier today when the

president had a campaign style rally here at the white house republicans certainly thought he was spiking the ball but the president and his aides say all he was doing is laying out once again, his principles in it this fight which he says is all about protecting middle class tax cuts. take a listen. >> preventing that tax hike has been my top priority because the last thing folks like the folks up here on this stage can afford right now you is to pay an extra $2,000 in taxes next year. middle class families can't afford it. businesses can't afford it. >> but the president went on to say that he will have what he has called again and again a balanced approach that it is not just going to be spending cuts in the days ahead when they have broader fights about deficit reduction in two months and beyond but also going to be about more tax increases in the days ahead and he said that that will be the approach as long as i'm president and i'm going to be president for another four years and there was loud applause from the audience there which is why

republicans said it was essentially a campaign rally. they teed off on the president and said basically he was rubbing their nose in their defeat. take a listen. time to stop the campaigning. the president won. we all know that. he won fair and square. but isn't it now time to govern? >> the president was absolutely out of line with his comments at 1:30 this afternoon. this is a delicate time in the negotiations. >> republicans suggesting there in this delicate time of negotiations the president may have turned off some republicans. we will see again whether or not senate republicans rank and file go along with their leader. it is a big deal that mitch mcconnell is expected to be voting for in. will his rank and file go along. more importantly in the days ahead will the rank and file on the house republican caucus go along. finally tonight will we see the president -- we are not expecting to see him tonight since this is not done-done

yet. more likely we will see him tomorrow, bret. >> bret: 20 seconds here, ed, before we take another break. but is it a loss for this white house that the debt ceiling part of this is not included? >> there is no doubt they wanted it included in here. they were fighting for are it. so it is is a loss in it that is sense but they will argue they won most of the other battles and they are willing to fight that one out in the days ahead although they believe that the republicans will pay a price if they turn it once again into a political football, bret. >> bret: and looks like it may just be heading right down that alley. ed henry live at the white house. we will be checking in again. vice president biden still meeting on capitol hill with senate democrats. covering all things fiscal cliff. by the way, under two hours to 2013 and bill and megyn having fun out there on times square. you can see them here tonight i promise. we won't do all fiscal cliff. maybe a little. keep it here. ♪

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>> bret: this is a fox news alert. i'm bret baier in washington covering the fiscal cliff issue as the senate democrats are meeting with vice president biden at this hour trying to finalize a deal. trying to move legislation forward that had been negotiated between vice president biden and senate republican leader, the minority leader mitch mcconnell. whether they can get the votes to pass the senate, whether that can then go to the house tomorrow and possibly get the votes to pass the thousand, those are all questions but one thing is clear, the u.s. is going technically over the fiscal cliff tonight set up at midnight. whether washington can stop the economic disaster that may come before wednesday when the markets would have the first chance to react to if something fell apart, that is really the question that the world is watching for. joining me now on the phone, chris stirewalt.

you take on all of this as this back and forth has happened and what we are seeing tonight? >> bret, when we look back at how this started we think about the republicans coming back to town after the election, john boehner coming back and offering the president more tax revenue. offered him $800 billion in increased tax payments in the form of loophole closures and no president said adamantly and we knew at that moment pretty well the first monday after the election we knew pretty well at that moment that the president wasn't keen to have a deal. did not want to have a big deal. wasn't looking for the kind of grand bargain that boehner and the conservatives in the house were looking for that 4 or $5 trillion deal. and the president set the stage at that moment. we are where we are are now which is something small that is mostly focused on a tax increase. and as you and ed were talking about before the break, when you saw what the president did today which was hold a campaign

style event and basically taunt house republicans and brag about their willingness to raise taxes, you could tell that the president was not only feeling very cocky but also that he was not looking to make this any easier for them. >> bret: but chris, you look at the polls and you realize that the president according to most polls is well above 50% in his favorability rating right now. he also when you ask the question who would be to blame should the country as it is now going over the fiscal cliff, and if there are repercussions, we will taking a look at video by the way of the event today with middle class families behind him at the eisenhower executive office building for that event, as you look at the polls, though, republicans have to realize the political danger that they potentially face with 2014 looming, not that far

away. >> and there are are primaries for the republicans to consider, too, and whether or not they can survive those. some conservative groups say it is not -- you are not voting for a tax increase if you don't vote to extend everyone's taxes. we get into a very legalistic sort of technical definition. but let me simplify it this way and say i don't know who was to blame for the titanic hitting the iceberg, that may have been the guy who was in the foxhole watching or are who was on night watch or the name of that guy, but i know it was the white star line that was running the unsinkable titanic and everybody knows that. so the thing that the president has to bear in mind is that in the narrow sense in terms of this negotiation and this agreement and what this drama, this dysfunctional drama playing out in washington tonight is, yes, perhaps the house republicans will be to blame. but if as you point out on wednesday if the markets react

poorly and if this is the beginning of a new you recessionary cycle the president of the united states, the person who was not able to bring people together and show that kind of patriotic grace to create a big deal and do a big thing at this moment he will be the one who will have to deal with that. >> bret: still watching our reporters outside the caucus meeting. last thing, chris, quickly. your sense of whether house republicans will go to this? 20 seconds. >> they are not going to try. the story is that the speaker and his team legislation is going come down from the senate. they will not whip it, they will not push or ask anybody to vote for anything they don't want to and nancy pelosi better have her team in line if the president wants to see this get through. >> bret: chris stirewalt. thank you. when we come back, how will wall street react as we were just talking about. rich edson with the fox business network joins us. that make moms happy too.

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>> bret: welcome back to washington. looking live at the ohio clock outside the senate chamber for a deal that has been struck according to the white house. vice president bide season sure talking to senate democrats for a long time, perhaps trying to twist some arms. joining me to talk about the s what wallction, the economic street, how it would look at this deal, if it all comes together tonight, rich edson with the fox business network. we talked earlier on "special report" going over the cliff going to happen technically because the house will take up whatever comes out of the senate if in fact it passes something tonight tomorrow, missing the deadline. but come wednesday what is wall street really looking for out of this government? out of congress and the white

house? >> well, this is a good first step, bret. and i think as the day progressed and you started to see inclinations that a deal at least among leadership was likely going come down and the possibility started to increase, wall street started to really buy into the stock market. you saw stock prices increase, finishing up 166 points and the dow jones industrial average today and after market trading what is known as the futures jumped up after news that things were beginning to progress. wall street looking even though this is just a small portion of a deal because it deals with avoiding a large broad-based tax increase, make sure that americans have more money in their pockets than they would if the entire fiscal cliff hit. bret, as you point out they still want a longer debt deal and want them to get the debt problems under control. >> bret: because the debt ceiling is really the next battle and just a few weeks away. >> we technically hit the debt

ceiling this evening. treasury does extraordinary measures that buys $200 billion that could take us two more months but the spiv fillings of this deal have a lot to do with how much room we have under the debt ceiling. that is the next fight. >> bret: rich edson with the fox business network which by the way if you don't get, you should demand it. nancy pelosi released the following statement saying i understand at the present time senate democrats are meeting with the vice president. while a final agreement is reached -- when a final agreement is reached rather and passed by the senate i will present it to the house democratic caucus. that is from nancy pelosi. obviously the combination of democratic votes and republican votes in the house would be needed to pass anything because the republican opposition to whatever comes out of the senate if in fact a piece of legislation does come out tonight will probably be great.

just hearing from some of the republican reaction to the no additional spending cuts part of the framework of this original deal. also remember this, that this negotiation has been really going on for some 18 months. lawmakers, the white house have known about this for a long time. we are about an hour and a half away from the top of the new year, from 2013. we are an hour a half away from the final fiscal cliff deadline that congress will now miss. we have not seen a piece of legislation on o the floor yet and we may still as we continue to monitor all things up and capitol hill. we have you covered. we also have you covered up at times square with ma megyn kely and bill hemmer up at times

square. they are having more fun. keep it right here on fox. ♪

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looking live. times square, new york city. dancing and getting ready. just an hour and a half to o 2013 and they are already celebrating tonight. probably celebrating because they just got word from the white house that there is a deal, a fiscal cliff deal. the problem is the dancing may not be happening all the way up here on capitol hill because, frankly, it still has to pass the senate and the house. but they can still cheer. i'm bret baier live in washington. we have the breaking news that they are very close they say to the final deal between senate democrats and republicans and vice president biden who is

currently meeting with senate democrats in a closed door meeting trying to get skeptical democrats to sign on to the mini deal that they are trying to avoid the fiscal cliff. the problem that they won't avoid it technically. they will miss the midnight deadline because the house has adjourned for the night. they don't have anything to score. they don't have anything to react to because no piece of legislation has made it to the senate. this s the shot we have been looking at for a long time just outside the senate chamber. if you just turn the camera a little bit you would see the door to the senate and so far there is nothing to vote on. the bill has to come from the senate to go to the house. the house will then react to it and that is really the question mark about how that is going to happen. here is how this deal looks like it is shaping up from what we are getting from reporters

and producers all over washington, the white house and up on capitol hill. income taxes for individuals making more than $400,000 a year and families making more than $450,000 a year. an increase to 39.6%. previously that was at 35%. payroll tax, a small cut in the social security tax for all earners will be allowed to expire. the alternative minimum tax, a permanent patch, permanent patch. it is called the amt. it would affect about 30 million taxpayers next year. that would be a permanent fix that usually congress has to do annually. dividends and capital gains taxed at 20% for individuals making at least $400,000 and families at $450,000. unemployment benefits long-term unemployed will be extended through the end of 2013. those benefits were set to expire on friday. the estate tax, there was back

and forth about this and frankly we don't know the final deal but the estate tax will have a $10 million exemption per couple. $5 million for an individual with additional inheritance taxed at 40 o percent. business tax credits for research experiment existences. the tax extenders they call through the end of 2013. stimulus tax credit. largely used by lower and middle class workersion tended as part of the stimulus package. included the child tax credit and earned income tax credit and college tuition tax credit and the doc fix. this is -- it stops a 27% rehe ducks in payments to medicare providers using spending cuts as offsets. the other thing this takes care of at least temporarily we are told is dealing with the sequester which is across-the-board cuts that would hit the pentagon

particularly hard but also domestic spending. we are told that there will be a two month hold off to that. and we don't know if there is an offset to try to offset that with additional spending cuts. we haven't heard that. that is what republicans were pushing for. joining me now up on capitol hill, our congressional producer chad. i think i went through that okay. >> i think you did. i think you did. i tell you the tough thing is going to be as you say the spending cuts. that is the devil in the details and that is what the house republicans will be looking for. as i talked to one house republican today, a senior member, he said look, you know, we may be better just dealing with the sequester because that gets us to spending cuts. this will turn off, going to extension wish the sequester for two months. some people in the house will be skeptical of that, bret. they want spending cuts. a lot of these republicans elected to the house of representatives in 2010 they came here, many of are tea party loyalists and they want

the deep spending cuts during this congress. still in that congress just for a couple more days and they don't think there have been spending cuts that have been deep enough and this will be the chair arery on top of the sundae where are they are saying this is not what voters sent us here to do bre. >> bret: what about the politics of this, chad? you talk to these members all of the time. i talked a little bit about it with ed henry and chris stirewalt, republicans have been getting hammered by this president on the stump and he has been making a lot of headway in the polls and clearly people if you ask them the question it seems like republicans would have a hard time convincing people that they are not to blame for this. the politics of this, even though spending cuts, the fact that the white house really didn't put forward any spending cuts and entitlement reform is going to be where the big

driver of dealing with the deficit and debt going forward is -- has to be dealt with. >> and that is the problem. we heard chatter earlier in the week yesterday in fact there was this so-called chain c.p.i. a change in the calculation to the consumer price index the way they would calculate your social security benefit. that was a poison pill to the democrats. they basically said look, we don't have a deal if you get into those area and those things entitlements, social security, medicare and medicaid are the chief drivers of the debt and there is nothing in here that deals with that. you have to remember that federal spending is sub divided into two areas. mandatory spending and nondiscretionary spending. the entitlement stuff. everything on the entitlement side this deal is silent on. when they deal with chain c.p.i., that possible change to the way that one would get their entitlements or are what they would qualify for, that is

toxic to house democrats and might be one of the reasons the house minority leader nancy pelosi is saying we want to take a look at this before we sign off on this. there will be a lot of people who want to see the devil in the details, want to see every jot and tittle and we are a long way from this passing all the way. >> bret: chad really does do work for us up there on the hill for fox. joining me is stephen from the washington times. your take on how this is developing and really how it may develop. we are already at 10:36 eastern time. we have not seen the vice president come out from the democratic caucus meeting where i guess he is trying to twist arms of skeptical democrats. >> yeah, you know, he has been in there for more than an hour. the longer he is in it there

doesn't necessarily mean the deal is in jeopardy but there are a lot of democrats venting over the details of it. in particular the estate tax rate and just the straight level of income for the rates returning to the clinton era, the 400 for individuals and $450,000 for families as you talked about earlier. there are a lot of democrats who think that obama campaigned very specifically on 250 and should have stuck with 250. you know, we'll see. i imagine that they do get enough democrats to go along with it. the bigger challenge at least in the senate, the bigger challenge will absolutely be the house. you know, if they put it for a vote there tomorrow. i guess beyond that, though, the bigger question is we may look back at this as obama's highwater mark. part of the reason why the liberal folks wanted him to push for 250,000 now is because this is obama's one shot atgeting tax increase rate increases. from here on out, it is going to be a lot tougher for him. almost impossible for him to

increase the rates at 250 or above after this. this is it for rates. going forward, any moneys he gets -- he is going to try and get out of taxes has to come from closing down loopholes and deductions. as we saw, that turns out to be a lot more difficult than going after tax rates and anything he gets out of that republicans are going to want to pump back in to lowering rates all around. i think in terms of taxes this is probably obama's high water mark. >> bret: it just seems like this is taking a long time for this caucus meeting particularly if all of the signals that were going out to all of the news organizations and all of the statements being made was that the deal is done and we have a deal, a very ecstatic looking vice president biden walking past reporters saying happy new year. you know, it seems like there could be some trouble here even on the senate side before you even get past the hurdle of the

house. >> you know, that is absolutely true. i think there is no question and we saw this actually earlier today even as the outlines were taking shape a number of democratic senators came to the senate floor and talked badly said this is not a bill that they would have signed and some even so far to say look this is not a deal we should accept and then tom thought we should go over the fiscal cliff and start from the standpoint when rates have gone up everywhere and then start and deal with rates after you have all of the new revenue coming in and sort of start from that point. there is a broad sentiment in there that is one way to go. that is exactly what vice president biden is hearing right now. the key question is how deep and how broad that is. it will be interesting to see whether they come out of this meeting thinking that they need to rewrite a couple of points in the bill which would put off any deal tonight yet again. if they have to go back to republicans because of what they are hearing in the room

that is bad news fora deal and you suspect the longer this goes on the more likely that is what is being discussed. >> bret: i agree with you. this is actually a long meeting at 10:40 when you are supposed to potentially move legislation to the senate floor tonight to take action potentially for the house to act tomorrow. stephen dinal with the washington times. thank you very much. i'm getting a lot of tweets from people who just are tired of fiscal cliff coverage. they just want to see megyn kelly and bill in times square dancing gangnam style or whatever they are doing. >> happy new year. >> take me out of fiscal cliff, washington. >> see yew in a minute, bret. happy new year. >> get you your feather boa ready. >> coming back to talk to you in just a minute. we'll be back with megyn and

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>> bret: this is a fox news alert. live in washington. bret baier live in washington. you can tell it is getting a little late after a long day of covering fiscal cliff coverage here as the deal appears to be heading in the right direction. although vice president biden is meeting with senate democrats and has been for the last hour and a half trying to twist arms and possibly get votes as a piece of legislation still has not materialized in the senate. meantime, the house has adjourned and they will meet again tomorrow. the u.s. is going over the fiscal cliff. the real question now is whether washington can get its act together before the economy takes a hit and whether

washington and lawmakers can somehow hold that off. the votes we don't know how they will come down and whether they will come down tonight in the senate or tomorrow in the house. but, tonight is also new year's eve. we are an hour and 15 minutes and 30 some seconds from the big crystal ball in times square and there you see it dropping down. and right in front of that crystal ball, my friends and colleagues, megyn kelly and bill hemmer. hi, guys. >> hey, bret. it's new year's eve. >> bret: how are you? >> we are doing fine. i think these are one of the many days, bret, no offense, we are thankful we live in new york city and not washington, d.c. >> did you draw the short straw or what, brother? >> bret: , we did a special report and thought this is great. we will do a live 8:00 p.m. and

be all set and then. >> go home with the kids and hang out with the wife, you know. >> i sent him an e-mail and said you had to horn in to the broadcast. i told him he will require a feather boa if he wanted to participate bret the tweets started coming in and they said this is the worst leadin to megyn kelly and bill hemmer that i seen on new year's eve. >> normally, bret, we have like taped programming this time of night. >> there is action tonight. >> like crickets out there. we have a expectation that is barely hanging on and -- we have a nation that is barely hanging on waiting for the folks in washington. >> to get their act together. >> and time rolls on and we are moving towards 2013. >> i have to think even though people are interested in the fiscal cliff and our taxes going up and what is going to happen with the nation's debt they are watching that, but you know, new year's is about so much more than that.

it is about personal affirmations and how you will change your life for the next year and looking forward. i feel like people focus more on the immediate family lives and concerns and on the financial matters sort of secondarily. make i'm wrong bret you are probably right. the lady that tweeted in, you are probably right, the worst leadin to new year's eve celebrations but it is a big deal that they are dealing with here. >> happy new year. here is higher taxes! >> they put the decision off a year and a half ago and set up the artificial deadline for today which is what, it is hang on. >> another hour. >> hour and 1 minutes away. >> -- an hour and 14 minutes away. >> we watch those things down there in washington and think something is going to happen and it doesn't and it gets delayed another day and another day after that. i think it is anybody's guess right now whether or not they get that thing done tomorrow or by the weekend. >> somebody better call john

boehner. >> bret: i think it is anybody's guess. the fact that vice president biden has been behind the meeting for an hour and a half that is supposed to be all a done deal. all of the wire reports are that the thing is all wrapped up. well, he is apparently trying to twist some arms back there in the senate liberal democrats who are not too happy about it. so i don't know if it gets past the senate yet. >> a great point. there are a million people gathered here in times square and you know what they are talking about? >> not this. >> not this. >> the fiscal cliff listen, here is is the truth. i think both of you guys are jut ignoring the elephant in the the living room which is here i stand with my two tv husbands and my actual husband at home. a very awkward situation. >> that's right. >> i'm married to bret on election night and bill on new year's eve and i'm really married to the man who i really love. call it throughout. a lot of love to go around.

>> two thorns, bret. >> that's right. a rose between two thorns. you are exactly right. >> how lucky am i, ladies? >> i'm the latest, that's right, bill. and this is now six years in the making new year's eve. >> 7 for me. >> you were cheating on me with julie banderas the first year. >> she hasn't gotten over it. >> she is home on maternity leave so she is not jealous. >> the truth is every year we do this, right, and then january 2 rolls around and megyn says i don't know if i want to do that next year. >> it is so cold. >> i don't know if i want to to it. >> and then december rolls around and what do you think. >> and then you come out here. now, they are playing john lennon's "imagine." a preview what what we will hear later. the viewers e-mail in and say john lennon, blah, blah, blah. it is a beautiful song and at the moment it is played here in times square and everybody sings together and sway and put their arms around each other

and the confetti starts to rain down. there are a few moments in your life where you feel that bonded to your fellow american citizensand japanese sit dens who make out most of the bulk of the times square million here. >> bret: take all of the people there in times scare and bring them up to capitol hill. and then maybe we get all of the fiscal cliff stuff taken care of. >> imagine john boehner, president obama and mitch mcconnell and harry reid with their arms around each other swaying to imagine and doing the old, new york, new york kick. >> bret: never know. >> i think they do that at the cocktail parties but will never do it on camera. >> i think the problem is they don't do it at the cocktail parties. >> happy new year, bret. >> bret: happy new year. >> you see in a bit. >> bye have fun. we'll be back with megyn and

bill at the top of the hour and i'll be back in just a minute to wrap it up. this is america. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day afr day... block the acid with prilosec otc and don't get heartburn in the first place! [ male announcer ] e pill eachmorning. 24 hours. zero heartbur

>> bret: this is a fox news alert. i'm bret baier live in washington. you are looking live just outside the ohio clock outside the senate chamber. just getting word from senate majority leader harry reid that the delay here according to senate democrats is that they are still waiting for the congressional budget office. they have to get a price tag from the c.b.o., the congressional budget office. and senator reid saying that that is what the delay is. as you look at reporters including our own chad pergram waiting around there for more info. also senator joe lieberman independent from connecticut who caucuses with the democrats says there will be a vote tonight on this package which means that there will be a vote

in the senate tonight. the house has adjourned until tomorrow. joining me now, a.b. stoddard with "the hill." your thoughts on this, the latest developments? >> well, bret, everyone wanted to make this sound hopeful in the last few hours and there is still hope something can get done on time or even before the new congress is sworn on thursday but senate democrats are unhappy. house democrats are unhappy, they think the white house gave too much away on marginal rates and the estate tax and we are hearing word from house republicans one top leadership aide told me it is a piece of junk what is coming over from the senate so far that they know. they haven't seen paper or a vote. we are still a long way to go as these things happen at last minimums get changed quickly. people are bent out of shape. there is 535 people to deal with so we are a long way from a signature. >> bret: sherrod brown says he will vote for it, the guidance

is that they need 90 minutes to two hours to it draft the paper work. i have 30 seconds here, a.b. what happens? >> if john boehner blesses this and supports it it, i bet you will see a good number of republicans join him. if the democrats follow their leadership on the same side and on the senate side as well, i think we will see a deal. it sounds very much like the paperwork and the policy details show the makings of a deal but again, we are talking about the last minute skirmishes that sometimes can delay these things. do i see a deal in the next couple of days? i do. do i see it tonight? i'm not sure. >> bret: a.b. stoddard with the hill. thank you very much. happy new year. we will ten to keep you covered thing fiscal cliff ander and all things watch and around the

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